As the American Institute of Architects’ Minnesota chapter prepares for its annual convention in Minneapolis, Minnesota design firms may be feeling a bit more optimistic than they did this time last year.

Minnesota architects still ‘treading water’

Pam Nelson, an AIA Minnesota staffer, holds a photo that will be displayed at the 78th annual AIA Minnesota Convention, which begins Tuesday and runs through Friday at the Minneapolis Convention Center. Attendance is expected to be consistent with previous years, AIA says. (Photo: Joey McLeister)

Modest gains in employment, billings as AIA gathers

As the American Institute of Architects’ Minnesota chapter prepares for its annual convention in Minneapolis, Minnesota design firms may be feeling a bit more optimistic than they did this time last year.

AIA’s leading economic indicator is looking up, employment at architecture firms appears to be getting better, and rental housing is riding high.

Still, there’s plenty of room for improvement.

“We are still treading water is probably the best analogy,” said Jon Buggy, architect and president of AIA-Minnesota, which has 2,200 members. “It’s kind of plodding along right now.”

The slow recovery apparently hasn’t diminished interest in the convention. This year, AIA Minnesota expects about 1,500 people to attend the 78th annual convention, which starts Tuesday and runs through Friday at the Minneapolis Convention Center.

AIA says 200 companies will set up exhibits, and presenters at 56 programs will delve into topics such as research tax credits for architects and engineers, sustainable affordable housing, historic rehabilitation, fee negotiations, and architect-led design-build.

Participation is consistent with recent years, according to Mary Larkin, AIA Minnesota’s communications director. The number of pre-registered visitors is “pretty much dead-on from what it was last year,” and the exhibitor space is sold out, Larkin said.

In a Tuesday afternoon program, Buggy will offer, among other things, an assessment of the status of the architecture profession in Minnesota.

Renovation work is moving forward, as well, as people invest in their current bricks and mortar rather than build new. That’s “good, smart, sustainable thinking, which architects love,” Buggy said.

Moreover, some architects are staying busy with less recognizable assignments, such as planning for future building needs. It’s a type of work that has “kept many of our firms healthier than they would be otherwise,” Buggy said.

A new report from the Associated General Contractors of Minnesota shows slightly more optimism about market conditions compared with last year.

Thirty-two percent of architects who responded to the association’s “Construction Industry Assessment for 2012-2013” said market conditions are improving, up from 30 percent in 2011, while 4 percent said improving rapidly, up from 0 percent a year ago.

However, the report cautioned that the industry is still “experiencing record high unemployment and recovering from a painful state government shutdown.”

In September, architecture billings rose “at their fastest pace since late 2010,” according to AIA. The AIA’s Architecture Billings Index, an indicator of future construction activity, rose from 50.2 in August to 51.6 in September.

Any reading over 50 indicates an increase in billings.

Multifamily housing has been the “one sector in the construction market that has done well,” but there’s a “mixed message” behind that success, according to Kermit Baker, AIA’s national chief economist.

“Multifamily has been doing well because a lot of people were foreclosed and could not get financing, so they became renters rather than owners,” which put pressure on the rental housing stock, Baker said.

Still, with single-family housing numbers looking better this year, the residential sector is becoming more balanced, Baker said. And since the beginning of February, hiring at architecture firms has been up every month compared to year-ago levels, Baker said.

“We now have nine straight months of increases in employment at architecture firms relative to a year ago. The combination of that and a good, healthy September number [in the billings index] does make it appear that we are finally going to see a sustained recovery get under way,” Baker said.

Among regions, the Midwest had the weakest reading in the September billings index (47.2), lagging the West (53.4), the South (51.9) and the Northeast (49.5).

Minnesota firms are doing better than the AIA index shows, because “our work is sought-after throughout the U.S. and the world,” Buggy said. “We work in many, many places. But we are still in a slump.”

Beverly Hauschild-Baron, executive vice president at AIA-Minnesota, said some firms are “doing pretty well making their way back” from the recession, but “there are still plenty of people who are not working.”

Correction

An earlier version of this article included an inaccurate job title for Jon Buggy. Buggy is an architect and president of AIA Minnesota.